Suppose that you have returned from your fishing expedition with 20,000 fish. The market price is $3 per fish. Your average fixed cost was $1 and your total variable cost was $5,000 . If the price jumps to $3.50 before you sell your first fish, how much extra profit, if any, do you earn?
a. c and d
b. Extra profit is zero.
c. Extra profit is enough to cover half of the fixed cost of your next trip.
d. Extra profit is enough to cover all of the variable costs of your next two trips.
e. Extra profit is $45,000.
D
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A closed economy refers to an economy with
A) no immigration. B) tariffs and import quotas. C) government control of all factors of production. D) no international trade.
A price ceiling that is set below the equilibrium price
A) causes suppliers to raise their prices. B) is binding. C) is non-binding. D) creates a surplus.
Under perfect competition, firms are relatively ignorant of the actions of their competitors.
Answer the following statement true (T) or false (F)
Suppose a buyer hires an interpreter who charges $5 to negotiate a deal with a seller. The buyer's valuation of the good is $50 and the seller's opportunity cost is $35 . If the net benefit to the buyer is equal to the same received by the seller, what is the price agreed upon by the two parties?
a. $42 b. $40 c. $44 d. $38